TikTok Makes Massive $1.5B Investment in Indonesia’s E-commerce Industry

TikTok is purchasing a majority stake in Tokopedia, Indonesia’s largest e-commerce platform, in a deal worth over $1.5 billion. TikTok plans to take a “controlling stake” in Tokopedia, with the investment being made “over time” to support the business. Although TikTok did not disclose its actual stake in Tokopedia, reports estimate it to be around 75%.

TikTok’s own commerce platform, TikTok Shop, will be integrated into Tokopedia under the deal. The new entity already plans to launch its first campaign, showcasing local merchants and products on both TikTok and Tokopedia. The deal is expected to close in the first quarter of 2024.

This move comes after the Indonesian government blocked e-commerce transactions on social media platforms in September, impacting TikTok’s previous plans to invest heavily in its e-commerce platform in Southeast Asia, particularly Indonesia. However, the region’s digital economy is on track to hit $100 billion in revenue, with e-commerce projected to reach $139 billion in Gross Merchandise Value (GMV) in 2023, and $186 billion in 2025.

TikTok’s investment in Tokopedia is set to capitalize on this growth, as it aims to expand its presence in the growing Indonesian e-commerce market. With plans to integrate TikTok Shop into Tokopedia, the deal is positioned to leverage both platforms’ strengths in a bid to capture a significant share of the region’s e-commerce market.